US Office S-REITs - DBS Research 2022-10-19: Are We There (Near Bottom) Yet?

• The US Office S-REITs have been one of the biggest ‘casualties’ among the S-REITs with share prices have declined 35% to 49% year-to-date. Manulife US REIT's share price and Prime US REIT's share price are now 39% and 10% below that of Mar 20 (COVID) low while Keppel Pacific Oak US REIT's share price is still 32% above Mar 20 (COVID) low. See summary of S-REIT's share price performance.
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Down but not out – some potential earnings risk but there are mitigating factors that could offset some earnings risks.

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• The adoption and impact from hybrid working is larger than expected
• US companies are in a stage of reviewing their office space needs

As such this may pose some potential earnings risk on the US Office S-REITs with potential higher vacancies. Some known larger vacancies to-date in Manulife US REIT’s and Prime US REIT’s portfolio could have driven the underperformance in share price compared to Keppel Pacific Oak US REIT.

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Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @ https://www.dbs.com/insightsdirect/.

Rachel TAN DBS Group Research | Derek TAN DBS Research | https://www.dbs.com/insightsdirect/ 2022-10-19 SGinvestors.io

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S-REIT Share Price Performance
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